Oil Monitor as of 25 April 2017

WORLD OIL PRICES (April 17-21, 2017 trading days)

Crude benchmarks dropped by an average of almost two dollars this week, reversing from previous week increases, generally due to reports of increasing US crude production as oil shale drilling activities increased. These were weighing over OPEC plan to extend output cuts for another six months.

Data from US drilling company Baker Hughes reportedly showed on April 21 that US drillers added oilrigs for a 14th consecutive week, bringing the total count to 688.

However, reports that Iran’s crude export is set to hit their lowest volume in 14 months, after stocks stored on tankers were cleared out, counterbalances the market.

In Asia, Platts noted of a stable gasoline market as of Friday, despite the Energy Information Administration (EIA) data showing a surprise build in US gasoline stocks. In terms of demand, majority of exports from India goes to Middle East, as the region requires more volume for summer demand and in preparation for Ramadan season; thus, reducing cargoes to Asia. Meanwhile, Singapore's commercial stockpiles of middle distillates fell in the week ended April 19, 2017. The significant decline in supply supports the recent steep climb in the value of the benchmark 500 ppm sulfur gasoil; the market of which has been busy due to a sharp increase in demand for the grade. The limited regional supplies were attributed by the on-going maintenance of many refineries and healthy demand, especially from governments that are stocking up ahead of the monsoon and Ramadan seasons.

Overall, Dubai crude decreased week-on-week by almost US$2.00 per barrel. Similarly, MOPS gasoline and diesel dropped by about a dollar.

FOREX: The value of Philippine peso appreciated against the US dollar by P0.03 to

Effective 25 April 2017, most oil companies implemented a a decrease of P0.20/liter gasoline, P0.30/liter in diesel and P0.40/liter in kerosene. Year-to-date, total adjutments resulted to net increase in both products, i.e. gasoline at P1.39/liter and diesel at P1.00/liter. LPG remains with net increase of P4.09/kg.

Oil Monitor as of 18 April 2017

WORLD OIL PRICES (April 10-14, 2017 trading days)

Crude benchmarks continued to recoup the March's losses on increased hopes that world supply and demand were nearing balance. All set for third consecutive weekly gain, benchmarks Dubai, Brent and WTI have respective average increases of almost US$2/bbl, all hovering above US$50 per barrel.

The market found more support from the latest monthly report of the International Energy Agency (IEA), stating that supply and demand in the global oil market are close to balance. OPEC is set to meet on May 25 to consider extending the cuts beyond June, and at the same time, however, U.S. production has continued to increase, with overall production rising to 9.24 million barrels a day out of the United States, according to U.S. Energy Department figures.

Moreover, while OPEC group is inclined to push prices higher, the US production growth on the other hand continues to cap prices. OPEC March data disclosed that members of the group had cut output beyond their pledged level. On the contrary, the Energy services firm Baker Hughes disclosed Thursday that US drillers added 11 oil rigs in the week to April 13, bringing the total count up to 683.

In Asia, Platts noted that gasoline market was beginning to see some support as the regional supply glut slowly clears up on strong demand in the Middle East. This brings the ample supply of gasoline in Asia falling more than the regional demand drop. As for gasoil, the ongoing refinery turnarounds was said to have attributed to the supply tightness of 500 ppm sulfur. Meanwhile, supply of 10 ppm sulfur gasoil remained sufficient. Moreover, demand in the Middle East is expected to increase in a couple of weeks as temperatures rise, Platts added.

Overall, Dubai crude increased week-on-week by nearly US$2.00/bbl. MOPS gasoline and diesel increased as well by about US$1.70 and US$1.50, respectively.

FOREX: The value of Philippine peso appreciated against the US dollar by P0.50 to

Effective 18 April 2017, most oil companies implemented a P0.45/liter increase in gasoline, P0.60/liter in diesel and P0.60/liter in kerosene. Year-to-date, total adjutments resulted to net increase in both products, i.e. gasoline at P1.14/liter and diesel at P0.65/liter. LPG remains with net increase of P4.09/kg.

Oil Monitor as of April 11, 2017

WORLD OIL PRICES (April 3-7, 2017 trading days)

Daily posting of crude benchmarks went up and down over the week, but averages generally increased between US$2 to US$3 per barrel.

Prices initially rebounded Monday on reports of upbeat economic data from Asia, indicating strong energy demand, and ended even higher Friday following the US’ missile attack on Syria airfield. Syria has limited oil production, but its location in the Middle East and alliances with big oil producers raised worries about a spreading conflict that could disrupt crude shipments.

Moreover, optimism on extension of OPEC production cut deal for another six months beyond June likewise supported the week’s price up-trend.

But price rebounds were capped by news of restored Libyan oil output and Baker Hughes data as of April 7, showing additional 10 oil rigs. These brought the total rig count up to 672, reportedly the highest count since August 2015. Further, the robust US oil production put a lid as the Organization of Petroleum Exporting Countries readies a decision on whether to extend its deal to cut production beyond June.

In Asia, gasoline market firmed on higher demand from Vietnam, Japan, Saudi Arabia, Malaysia and Indonesia, though supply remained ample and stocks are high as disclosed by the International Enterprise Singapore. On the other hand, Asian 10 ppm gasoil supply remained sufficient to meet demand even amid the peak turnaround season in North Asia. Price level of 500 ppm gasoil was supported by firm demand.

Overall, Dubai crude increased week-on-week by about US$2.50/bbl. MOPS gasoline and diesel increased as well by more than US$3 and US$2, respectively.

FOREX: The value of Philippine peso appreciated against the US dollar by P0.04 to P50.16/$, from P50.20 last week.

Effective 11 April 2017, the oil companies implemented an increase of P1.10/liter for gasoline and P0.90/liter for diesel and kerosene. Year-to-date, total adjutments resulted to net increase in both products, i.e. gasoline of P1.14/liter and diesel of P0.65/liter. LPG remains with net increase of P4.09/kg

As monitored, shown below are the retail prices in Metro Manila beginning 11 April 2017.

Oil Monitor as of 4 April 2017

WORLD OIL PRICES (March 27-31, 2017 trading days)

The rising expectations to extend the OPEC production deal pushed oil prices higher by more than four (4) percent in the past week. Analysts see the extension is probable as Kuwait and several other OPEC members voiced support to roll over cuts for another six months.

But the International Energy Agency’s (IEA) Executive Director Fatih Birol disagreed with the idea that an extension would lead to higher oil prices. Reportedly, keeping the cuts of 1.2 million barrels per day in place for another six months might not resolve the supply problem this year, considering the tremendous amount of stock in the markets. IEA argued that it is not just U.S. shale coming online. Supply is also set to come from other non-OPEC producers, namely, Brazil and Canada.

Any price increase would simply spark new supply, a development that would quickly bring prices right back down. That echoes a call from Goldman Sachs, which has maintained that the OPEC cuts will not engineer higher prices. Recently, Goldman stated further that even extending the cuts beyond June might be self-defeating.

In Asia, Platts viewed the gasoline market as fundamentally weak. China’s export to Singapore was down 38% week on week with the approaching refinery maintenance season. However, opinions were mixed on the demand outlook for Ramadan, with some expecting it to improve in the lead-up to the month and others expecting Ramadan demand to be moderate as last year. On the other hand, Asian 10 ppm gasoil prices remained supported by the on-going refinery turnarounds in South Korea, China and Japan, which have cut supply of 10 ppm gasoil. Meanwhile, demand for 500 ppm gasoil remained healthy, which kept supply balance to tight.

Overall, Dubai crude increased week-on-week by US$0.40/bbl. Similarly, MOPS gasoline and diesel increased by almost one dollar per barrel.

FOREX: The value of Philippine peso appreciated against the US dollar by P0.06 to

Effective 04 April 2017, most of the oil companies implemented a P0.35/liter increase in gasoline and diesel, while kerosene is increased by P0.30/liter. On 01 April 2017, the price of LPG dropped by P5.00/kg or P55.00/11kg, reflecting the decrease in LPG Contract Price for April by US$92/MT to US$472/MT, from US$564/MT last month. ​Year-to-date, total adjustments of gasoline now is to net increase of P0.04/liter and diesel also at net decrease of P0.25/liter. LPG has net increase of P4.09/kg.

Oil Monitor as of 28 March 2017

WORLD OIL PRICES (March 20-24, 2017 trading days)

Crude oil prices sustained modest decreases over the week, reportedly pressured by another weekly rise in the U.S. oil-rig count and uncertainty over whether OPEC will extend its production cuts into the second half of the year.

Reports further disclosed that while an extension remains uncertain, OPEC members appear to be largely in favour and will be keen to press ahead if they can secure support from the 11 non-OPEC members who have joined their drive to reduce output. Unless OPEC extends the curbs beyond June or makes bigger cuts, traders say oil prices are at risk of falling further.

On Thursday, a Saudi energy ministry official announced that crude exports to the United States in March would fall by around 300,000 barrels per day from February and hold at those levels for the next few months. The drop in exports is expected to draw down U.S. inventories that stood record highs of more than 500 million barrels last week, stocks that have in part remained buoyant because of reduced seasonal refining runs.

Meanwhile, the latest U.S. drilling rig count showed an increase of 14 rigs, the tenth straight weekly rise, according to Baker Hughes data.

In Asia, Platts noted of excess supply and on-going limited demand that weighed on gasoline market. Traders reported that the market was overall quiet as sentiment remained stable to slightly bearish. As for the Asian gasoil, market fundamentals were unchanged. The 500 ppm sulfur grade remained to have tight supply as several plants in the region were still shut for maintenance. Reports also said, Asian refiners had cut supply of 500 ppm grade in line with changing regulations over recent years, though there was still demand for the grade. On the other hand, the 10 ppm grade was reported as oversupplied.

Overall, Dubai crude decreased week-on-week by US$0.60/bbl. Similarly, MOPS diesel decreased by about US$0.80 contrary to gasoline that moved higher by US$0.10 a barrel.

FOREX: The value of Philippine peso against the US dollar sustained at P50.26/$.

Effective 28 March 2017, most of the oil companies decreased their prices of diesel and kerosene by P0.25 and P0.15 per liter resepectively. There is no movement in the price of gasoline. Year-to-date, total adjustments of gasoline remain at net decrease of P0.31/liter, while that of diesel moved lower to net decrease of P0.10/liter.